In 2007, U.S. nonfarm businesses with employees spent a total of $264.2 billion on noncapitalized and capitalized information and communication technology (ICT) equipment, including computer software, an increase of 4.4 percent from the revised 2006 estimate of $253.0 billion.¹ (See Table A below, and appended Table 1a and 1b.)

Noncapitalized ICT spending in 2007 was $94.4 billion (35.7 percent of total spending), not statistically different from 2006². Capitalized ICT spending in 2007 increased by 5.9 percent to $169.8 billion (64.3 percent of total spending).

Noncapitalized expenditures. Of total 2007 noncapitalized ICT spending ($94.4 billion), purchases of ICT equipment accounted for $20.2 billion (21.4 percent), an increase of 7.0 percent from 2006. Operating leases and rental payments accounted for $17.8 billion (18.8 percent). Computer software expenditures accounted for $56.4 billion (59.7 percent). Note: If an increase or decrease compared with 2006 is not stated in the text, then there was no statistically significant difference between 2007 and 2006 data.

Purchases of ICT equipment. Of the $20.2 billion spent on noncapitalized ICT purchases, computer and peripheral equipment accounted for $13.5 billion. ICT equipment excluding computers and peripherals accounted for $6.4 billion, an increase of 13.1 percent from 2006; and electromedical and electrotherapeutic apparatus accounted for $0.3 billion.

Operating leases and rental payments. Of the $17.8 billion spent on noncapitalized operating leases and rental payments, computer and peripheral equipment accounted for $12.1 billion; ICT equipment excluding computers and peripherals accounted for $4.5 billion, a decrease of 18.2 percent from 2006; and electromedical and electrotherapeutic apparatus accounted for $1.2 billion.

Computer software expenditures. Of the $56.4 billion spent on noncapitalized computer software, $30.5 billion was for purchases and payroll for developing software; $25.9 billion was for software licensing and service/maintenance agreements, an increase of 11.4 percent from 2006.

Capitalized expenditures. Of total capitalized ICT spending in 2007 ($169.8 billion), purchases of ICT equipment accounted for $106.5 billion (62.7 percent), an increase of 5.3 percent from 2006. Capitalized purchases and payroll for developing software accounted for $63.3 billion (37.3 percent), an increase of 6.8 percent from 2006.

Purchases of ICT equipment. Of the $106.5 billion spent on capitalized ICT purchases in 2007, computer and peripheral equipment accounted for $58.6 billion; ICT equipment excluding computers and peripherals accounted for $42.8 billion, an increase of 9.5 percent from 2006; and electromedical and electrotherapeutic apparatus accounted for $5.1 billion.

Selected sector highlights

Complete sector level data are provided in Table A below and in the publication Tables 2a-4d. Also see Figures 1, 2, 3, 4.

Information. In 2007, the information sector spent $63.8 billion for ICT equipment and computer software, or 24.1 percent of all 2007 ICT spending. Of this amount, $12.7 billion (19.9 percent) was for noncapitalized expenditures, a decrease of 10.5 percent from 2006, while $51.1 billion (80.1 percent) was for capitalized expenditures, an increase of 4.1 percent from 2006.

Finance and insurance. Spending in this sector for ICT equipment and computer software totaled $52.5 billion in 2007, an increase of 6.1 percent from 2006. Of this amount, $23.4 billion (44.6 percent) was for noncapitalized spending, and $29.1 billion (55.4 percent) was for capitalized spending, an increase of 6.4 percent from 2006. The finance and insurance sector accounted for 19.9 percent of all 2007 ICT spending.

Manufacturing. The manufacturing sector spent $36.2 billion for ICT equipment and computer software in 2007, an increase of 2.6 percent from 2006. Of this amount, $17.7 billion was for noncapitalized expenditures, an increase of 2.5 percent from 2006, while $18.5 billion was for capitalized expenditures. In 2007, manufacturing accounted for 13.7 percent of all ICT spending.

Durable goods manufacturers spent $22.0 billion on ICT equipment and computer software in 2007. Of this amount, $11.1 billion was for noncapitalized ICT expenditures; $10.9 billion was for capitalized expenditures, an increase of 4.3 percent from 2006.

Nondurable goods manufacturers spent $14.2 billion on ICT equipment and computer software in 2007, an increase of 5.2 percent from 2006. Noncapitalized expenditures totaled $6.6 billion, an increase of 11.2 percent from 2006, while capitalized expenditures were $7.6 billion.

Professional, scientific, and technical services. ICT spending in this sector totaled $24.9 billion in 2007. Of this amount, $11.3 billion was for noncapitalized ICT and $13.6 billion for capitalized ICT. In 2007, this sector accounted for 9.4 percent of all ICT spending.

Health care and social assistance. This sector spent $21.4 billion on ICT equipment and computer software in 2007, an increase of 12.3 percent from 2006. Of this amount, $6.9 billion was for noncapitalized expenditures; $14.5 billion was for capitalized expenditures, an increase of 10.9 percent from 2006. The health care sector accounted for 8.1 percent of all ICT spending in 2007.

Retail trade. In 2007, the retail trade sector spent $17.1 billion on ICT equipment and computer software, an increase of 15.4 percent from 2006. Of this amount, $4.7 billion was for noncapitalized ICT, an increase of 20.4 percent from 2006; and $12.4 billion was for capitalized ICT, an increase of 13.7 percent from 2006. In 2007, retail trade accounted for 6.5 percent of all ICT spending.

Wholesale trade. In 2007, the wholesale trade sector spent $9.2 billion on ICT equipment and computer software, an increase of 16.6 percent from 2006. Of this total, noncapitalized spending accounted for $3.1 billion, an increase of 17.1 percent from 2006, and capitalized spending accounted for $6.1 billion, an increase of 16.4 percent. In 2007, wholesale trade accounted for 3.5 percent of all ICT spending.

Transportation and warehousing. This sector spent $5.1 billion on ICT equipment and computer software in 2007, an increase of 10.6 percent from 2006. Of this amount, $1.8 billion was for noncapitalized expenditures, an increase of 17.9 percent from 2006, and $3.3 billion was for capitalized expenditures, an increase of 7.0 percent from 2006. The transportation sector accounted for 1.9 percent of all ICT spending in 2007.

Construction. In 2007, the construction sector spent $2.9 billion on ICT equipment and computer software, an increase of 16.4 percent from 2006. Of this amount, $1.2 billion was for noncapitalized equipment and computer software, an increase of 18.6 percent from 2006. Capitalized ICT spending totaled $1.7 billion. In 2007, this sector accounted for 1.1 percent of all ICT spending.

Mining. In 2007, ICT spending in the mining sector totaled $2.6 billion, an increase of 30.7 percent from 2006. Noncapitalized expenditures were $1.2 billion, an increase of 75.9 percent from 2006. Capitalized expenditures were $1.3 billion. The mining sector accounted for 1.0 percent of all ICT spending in 2007.

Management of companies and enterprises. In 2007, this sector spent $2.1 billion on ICT equipment and computer software, an increase of 18.3 percent from 2006. Noncapitalized expenditures totaled $0.7 billion. Capitalized expenditures totaled $1.4 billion, an increase of 32.0 percent from 2006. In 2007, management of companies and enterprises accounted for 0.8 percent of all ICT spending.

Endnotes

¹The revised total expenditures estimate for 2006 reflects an upward revision of $1.9 billion in noncapitalized expenditures to $92.6 billion, and an upward revision of $0.5 billion in capitalized expenditures to $160.4 billion.

² Estimated measures of sampling variability have been calculated for each estimated total and for each estimated percentage change and have been used to construct 90-percent confidence intervals for all estimates of change. Confidence intervals are shown as margins of error in Table A. For example, the 90-percent confidence interval for an estimated change of 1.9 percent with margin of error +/- 3.4 percent is 1.9 +/- 3.4 percent, or - 1.5 percent to 5.3 percent. If the confidence interval includes zero, then it is uncertain whether there was an increase or a decrease; that is, the change is not statistically significant, and the current year estimate is not statistically different from the prior year estimate at the 90-percent confidence level. If an increase or decrease compared with 2006 is not stated in the text, then there is no statistically significant difference between the estimates for 2007 and 2006. See the Sampling and Estimation appendix for more information on survey design, methodology, and sampling and nonsampling error.

Acknowledgments

The Company Statistics Division prepared this report. Charles A. Funk, Assistant Division Chief for Surveys and Programs, was responsible for the overall planning, management, and coordination. Primary assistance for planning and implementation were under the direction of Valerie C. Strang, Chief, Business Investment Branch, assisted by Venita Holland, Sara Prebble, Derrick Roy, and Victor Souphom, Section Chiefs, Business Investment Branch. Primary staff assistance was provided by Ayub Abdallah, Brian Bonner, Larry S. Chomsisengphet, Beth Evans, William Gainor, Ashley Hildebrandt, Carly Johnston, Jungjin Kang, Kimberly Keller, Demetrius Lambeth, Harold Laney Jr., Joshua Lewis, Conrad Munger, Omar Nix, Sherrita Powell, Alan Tominack, and Matt Wills. Additional assistance was provided by Marie Rustin.

General direction for statistical methodology was provided by Carol Caldwell, Assistant Division Chief for Research and Methodology, and Mark S. Sands, Chief, Statistical Research and Methods Branch. Jeffrey L. Dalzell, Tameka Johnson, Justin Smith, and Yarissa Gonzalez developed and implemented the sample design, nonresponse adjustment and estimation methodology.

The Economic Planning and Coordination Division, William Samples, Chief, Mailout and Data Capture Branch, coordinated survey mailout and data collection with Section Chiefs Stephanie Studds, Christopher Berbert, and Amanda Williams. Primary assistance was provided by Loretta Brawner, Bernadette Gray, and Dameka Hemsley.

The staff of the National Processing Center, Angela Feldman-Harkins, Assistant Division Chief for Processing, performed mailout preparation and receipt operations, clerical and analytical review activities, and data entry.

The Economic Statistical Methods and Programming Division, Kenneth Keer, Chief, Current Manufacturing and Company Statistics Annuals Branch, developed and implemented computer processing systems. Nestor Baez Jr., Supervisory Computer Specialist Systems Analyst, supervised the preparation of computer programs. Stephen Potemkin was responsible for frame creation and sample selection. Tony Duong, Barbara Harris, Kavita Khaneja, and Diane Musachio were assigned primary programming responsibilities.

Finally, a special acknowledgment is due to the many businesses whose cooperation was essential to the success of this report.

If you have any questions concerning the statistics in this report, call 301-763-3324.